This Indore-based food-tech startup is profitable and on its way to clock Rs 1cr monthly revenues
Back in 2012, Indore had won the ‘Best Foodie City Award’ by NDTV Good Times Food Awards. Food startups have a competitive market with a plethora of options from local vendors, street food shops and established brands. When Oye24 charmed the demanding people of Indore with its 24/7 AFAP (as fast as possible) delivery, it became a feat.
Oye24 is an Indore-based food producer, aggregator and delivery startup. It offers 24/7 free delivery services with no minimum order size, consistent food quality and pocket-friendly prices. It serves multiple cuisines from various vendors along with food cooked at its own in-house kitchen.
The startup has earned a reputation, especially among a large student population, with its late-night food delivery services. Started in November 2015, Oye24 today delivers around 350-450 orders per day during the week and during weekends it goes up to 450-550 orders per day. “We have delivered over 30,000 orders and served more than 10,000 customers so far. Since January our order volume has increased by six times,” informs 47-year-old Manish Chhajed, Co-founder of Oye24.
The idea of Oye24 was born during a family get-together. It all started when the co-founders were trying to order food for their kids and to their surprise found that none of the food delivery applications had free delivery and has minimum order size. The co-founders then finalised on the idea of Oye24 that day.
Online Indian food business and competition
According to India Brand Equity Foundation report, Indian food service industry is expected to reach $78 billion by 2018. The Indian gourmet food market is currently valued at $1.3 billion and is growing at a compound annual growth rate (CAGR) of 20 percent. India's organic food market is expected to increase by three times by 2020. The online food ordering business in India is still in its nascent stage, but has an exponential growth ahead. The report also stated that the organised food business in India is worth $48 billion, of which food delivery is valued at $15 billion. (Source)
There has been an exponential growth in the number of food aggregators (Swiggy, Food Panda, Faasos, Dazo). However, rapid growth has also resulted in faster failures. For example, Tiny Owl closed down and Zomato shut down its operations in many cities. The future of the food tech startups has been a hot topic of debate in the ecosystem. Yet, there are examples of food recommendation apps such as Bingage (Indore) or FoodbyMood (Nagpur) that scaled up fast. How does Oye24 plan to compete in case more food recommendation startups surface?
“We are aware of the competition Faasos and Food Panda post in similar space. But more than companies coming into the space, the challenge is to compete with home-made food. We have decided that we will not offer discounts, either now or in future even if competitors do. We would instead maintain this seamless process of quality food supply that would surely keep people coming to us,” adds Mishal, 24, Co-founder of Oye24.
Oye24 has a fleet of 60 people including cooks, delivery boys, administration and operations team.
A family that started up
What’s interesting is this disruptive startup was born within a family. Mishal earlier worked in Tata motors for about two years, while the rest of the three co-founders and family members Rahul Badhera (48), Ritesh Chhajed (42) and Manish had their own business.
Mishal believes that there are both experienced and young individuals in the team. While the tech team including the mentor Vivek Deshpande are mostly graduates from National Institute Of Technology, Bhopal, Mohit Kukreja is the Chief of Kitchen Operations & Product Development and Sawan Patidar is Chief of Marketing & Data. Siddharth Parashar is company's CTO.
Ritesh says, “We ran a pilot assignment in November 2015 when we began with 10-15 orders per day. By December, we were touching up to 60 orders per day. We became confident of the acceptance.” The co-founders invested Rs 12 lakh from their personal savings to set up a complete and advanced infrastructure of the kitchen and re-launched Oye24 in January 2016.
Currently bootstrapped, Oye24 has been a profitable proposition right from the start. The vendors pay a certain commission for listing their dishes on the web application. “Our daily sales vary from Rs 40,000‑60,000 on weekdays and Rs 55,000‑85,000 on weekends,” he adds.
Oye24 lists food items in more than 11 broad categories including midnight snacks, combos and add-ons. Oye24 delivers food value of as low as Rs 24 (creamroll) or Rs 75 (Puribhaji) without charging for delivery.
Oye24 aims at opening six to seven more kitchens within the city soon. “We are desperate to start on-demand food meaning whatever customers wish to eat, they can customise instead of choosing from existing lists. We have plans in place for scaling up to multiple locations, catering to parties and conferences along with starting up with subscription facility for various customers, companies, organisations,” informs Rahul. Oye24 is targeting a revenue of Rs 70 lakh to Rs 1 crore per month by November 2016.